Facts: Husband and Wife divorced after seven years of marriage.

In January 2020, the trial court continued the trial, ordered Husband to submit to a psychological evaluation, declared the parties divorced, and reserved all other matters for trial.

The trial took place over three days in May 2021. The final judgment of divorce was entered in July 2021.

As for the value of the marital residence, Husband’s appraiser testified the property was valued at $565,000 as of February 2020.

Wife submitted no evidence about the value of the marital residence on the date the parties were divorced (January 2020). Instead, she testified that, as of the final hearing in May 2021, the property was worth $639,900.

The trial court found the value of the marital residence to be $602,450, which was the midpoint between the values submitted by the parties. The trial court also ordered that the marital residence be sold and the net proceeds equally divided between the parties.

Husband appealed, arguing that the trial court erred in valuing the marital residence.

On Appeal: The Court of Appeals reversed the trial court.

Tennessee law requires that courts place a reasonable value on marital property subject to division “as of a date as near as reasonably possible to the final divorce hearing date.” Each party bears the burden of submitting competent evidence. If the evidence of value conflicts, the trial court may assign a value within the range of values supported by the evidence.

The Court found the trial court erred in considering Wife’s evidence of value:

Husband asserts, and Wife concedes, that the trial court erred in relying on Wife’s valuation evidence to establish the valuation for the marital residence because the evidence was not “as near as reasonably possible” to the date the parties were declared divorced.… This Court has construed the phrase “final divorce hearing day” and held that the appropriate date for valuing the parties’ property is the date the decree is entered declaring the parties divorced.

In the present case, the trial court entered a decree declaring the parties divorced on January 22, 2020. Thus, the marital residence should have been valued as near as possible to that date. The written appraisal submitted by Husband established the value of the property as of February 12, 2020, which was within a few weeks of the court declaring the parties divorced. Wife, on the other hand, only submitted evidence establishing the value of the property as of the date of the final hearing on the property distribution and child custody issues, which was nearly a year and a half after the court declared the parties divorced. Thus, the only competent evidence of the properties value reasonably near the date the parties were declared divorced was Husband’s valuation of $565,000. We, therefore, conclude that the trial court’s order should be amended to provide that the marital residence was valued at $565,000.

The Court reversed and modified the trial court’s judgment.

K.O.’s Comment: In the end, the value of the marital residence is unimportant because the trial court ordered the property sold and the net proceeds equally divided between the parties.

Source: Duffer v. Duffer (Tennessee Court of Appeals, Middle Section, March 8, 2024).

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